Ronstar
Moderator Emeritus
Im starting to rough calculate tax scenarios for 401k and IRA withdrawals down the road in retirement. Originally I thought I would live on taxable investments as long as possible before taking 401k/IRA withdrawals. But now I'm not so sure if this is the best solution tax wise.
I'm playing with an RMD calculator and it looks like the RMD for my 401k will be more than I will need when I'm 70-1/2. And I read online that 401k distributions are taxed as ordinary income. This would create a huge tax burden in the future.
Some people are converting all or part of their 401k's to Roth IRA's to minimize the future tax bite, but it seems that the biggest benefit of the Roth conversion goes to the heirs of the investor. We have no kids, so I'm not sure if this would work for us.
I'm going to dig deeper, research, read some books, etc. Can anyone recommend books, etc that address the tax consequences of withdrawals, and share what you and others have done to minimize the tax burden?
I'm playing with an RMD calculator and it looks like the RMD for my 401k will be more than I will need when I'm 70-1/2. And I read online that 401k distributions are taxed as ordinary income. This would create a huge tax burden in the future.
Some people are converting all or part of their 401k's to Roth IRA's to minimize the future tax bite, but it seems that the biggest benefit of the Roth conversion goes to the heirs of the investor. We have no kids, so I'm not sure if this would work for us.
I'm going to dig deeper, research, read some books, etc. Can anyone recommend books, etc that address the tax consequences of withdrawals, and share what you and others have done to minimize the tax burden?